United States Attorney Carol C. Lam announced that San Diego attorney Roland Frasier pled guilty to charges caused in connection with his role in offshore tax evasion schemes and the laundering of the proceeds of securities fraud charges.
Frasier submitted his guilty plea in U.S. District Court in San Diego, California, before Magistrate Judge William McCurine, Jr., admitting to one count of aiding and abetting income tax evasion, one count of filing a false tax return, and one count of money laundering.
What Exactly did Roland Frasier do?
According to the plea agreement filed in the case, Frasier was a partner in the San Diego legal firm of Gage, Frasier & Teeple, which specialised in “asset protection planning” using offshore trusts and corporations.
Dr Glenn Kawesch, an ophthalmologist in La Jolla, California, hired Frasier in April 1998 to set up a Nevis corporation and trust. The Nevis corporation was called Sequoia, Ltd., and it was owned by a Nevis trust called Questar Trust.
Dr Kawesch was the beneficiary of Questar Trust. During the course of retaining Frasier’s legal services, Dr Kawesch informed Frasier that he had a considerable sum of cash from his ophthalmology practice that he did not want to pay income taxes on and that he wanted to protect from creditors.
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Frasier agreed to assist Dr Kawesch in putting the funds into a foreign bank account in order to fraudulently avoid paying Dr Kawesch’s income taxes. Frasier received roughly $250,000 in cash from Dr Kawesch in April 1998, which Frasier knew was money from Dr Kawesch’s ophthalmology practice.
Frasier arranged for funds to be transferred into a Sequoia, Ltd. bank account at the Bank of Nevis. Frasier later assisted in the return of the funds by opening a nominee brokerage account in Dr Kawesch’s name in San Diego, California, and transferring the funds held in Nevis. Dr Kawesch did not pay income tax on the $250,000 cash he received.
What is Tax Evasion?
Tax evasion is an illegal factor of doing anything where you as an individual or organization avoid paying the tax liability.
Roland Frasier’s further involvement in Tax Evasion
Frasier further admitted in connection with his plea that when he received $1 million from Dr Kawesch in December 1998, he was involved in a tax evasion scheme.
When Frasier transferred the funds offshore to the Sequoia Ltd. bank account at the Bank of Nevis to assist Dr Kawesch in fraudulently avoiding Dr Kawesch’s 1998 personal income taxes, Frasier knew the money was income from Dr Kawesch’s ophthalmology practice.
Frasier used a fake Marketing Service Agreement between Dr Kawesch’s ophthalmology practice, Southwest Eye Care, and a foreign nominee entity called Telco, Ltd. to continue the tax evasion scheme.
In reality, the fake Marketing Service Agreement was created expressly to conceal a fictitious $1 million advertising charge reported by Dr Kawesch on Southwest Eye Care’s corporate tax return.
Frasier charged Dr Kawesch a 9% fee ($90,000) for these services, which he did not declare as gross receipts to his law business partnership or as income to himself on his 1998 personal income tax return.
How Roland Frasier filed false Income Tax Returns
Frasier also filed false personal and firm income tax returns, according to the plea agreement.
He worked as an officer for several types of domestic firms. Frasier defeated business income to third-party entities over which he had authority throughout the tax years 1997, 1998, and 1999, including the Gauge, Frasier, & Teeple Client Trust Account and nominee foreign corporations.
Roland Frasier did not report the diverted business income on his personal income tax returns and used the funds for personal purposes.
For the tax years 2000 and 2001, Frasier Frasier filed corporate tax returns deducting fake expenses he described as “licencing fees” and “legal expenses,” and put the funds into the Gage, Frasier & Teeple Client Trust Account, which he later used to pay for personal expenses.
For the tax years 1997 through 2001, Frasier’s unreported income exceeded $3.3 million, resulting in a total tax loss of more than $934,000.
SEC Allegations Against Attorney Roland Frasier
According to the complaint, The SEC filed a complaint against Roland Frasier in the United States District Court for the Southern District of California on October 2, 2003. Frasier was accused of engaging in fraudulent actions in violation of the Securities Exchange Act of 1934.
From about October 1999 to November 2000, Frasier was charged by the SEC with orchestrating a scheme to manipulate the market of Zandria common stock.
The Scheme:
According to the SEC’s complaint, Frasier was involved in several types of transactions during the specified time period. Over 90% of Zandria’s free-trading shares were transferred to four offshore firms secretly owned by Frasier and two related stock promoters.
Frasier further arranged for Zandria to become a publicly traded company through an asset acquisition deal with a public corporation, and he falsely gained $100,000 from the transaction.
The Market Manipulation:
In April 2000, Zandria’s stock began trading on the over-the-counter (OTC) bulletin board. During this time, the complaint claimed that two stock promoters, working with Frasier, paid telemarketers bribes ranging from 10% to 30%.
The goal was to get investors to buy Zandria stock on the OTC bulletin board while the promoters sold $1 million in Zandria stock they owned into the inflated market. As a result of the fraudulent stock sales, Frasier and the two stock promoters allegedly shared the proceeds, with Frasier collecting around $180,000.
Legal Consequences:
With the exception of the Commission’s authority, Roland Frasier agreed to the entry of a Final Judgement without admitting or denying the charges. The Final Judgement was issued on October 20, 2003, by the United States District Court for the Southern District of California.
It permanently barred Frasier from violating the Securities Exchange Act in the future and issued a number of regulations including a prohibition from participating in any penny stock offering, a $280,000 disgorgement plus prejudgment interest of $65,898.43, and a civil money penalty of $110,000.
Statements Against Roland Frasier
“It is sad and inexcusable that a lawyer was involved in the creation of this elaborate tax evasion scheme,” said United States Attorney Lam. A professional licence does not grant the right to steal.”
According to Denise L. Rubin, IRS Criminal Investigation Division Special Agent in Charge for San Diego, “those who attempt to conceal their true income from the Internal Revenue Service through sham transactions and offshore schemes, or assist others in doing so, run a very high risk of being criminally prosecuted.
Furthermore, Roland Frasier is prohibited from appearing or practicing as an attorney before the Commission, according to the Commission.
Who is Roland Frasier?
Roland Frasier is an attorney who has been authorised to practise law in California since June 1990, according to the SEC. Roland Frasier previously worked as a partner in a San Diego, California law company that specialized in “offshore asset protection.”
Frasier represented Zandria Corp., a Nevada corporation headquartered in San Diego, California, as well as organisations and people linked with Zandria.
Roland Frasier is also the founder of EPIC Network, which claims to offer tools, training, and strategies to assist people to increase their wealth and impact. He also claims to be a business strategist and investor who has completed over 1,000 acquisitions and exits for himself and his clients.
Frasier’s current portfolio firms include real estate, restaurants, business and home services, events, eLearning, e-commerce, franchising, and SaaS businesses, according to the Epic Network website.
He also claims to have served on the Stanford University Global Projects Advisory Board and the Family Office Steering Committee.
About Epic Network
EPIC Network was established for company owners, entrepreneurs, and those who support them. Claims provide tools, training, and strategies to assist individuals in growing their wealth.
According to the company, there is a gap in the education of most business programs. So, they only teach conventional finance.
EPIC Network claims to be dedicated to introducing people to a completely new side of M&A known as creative financing. They further assert that even if individuals have previously worked in the M&A industry, they are unlikely to have been taught the tactics they teach or had access to the same resources that they give.
However, it is also worth noting that many customers have had poor experiences with Epic Network. That portrays them in a very different way than what they claim.
Conclusion
Roland Frasier, a San Diego attorney, has pled guilty to offshore tax evasion and filing fraudulent income tax returns.
The SEC’s allegations that he participated in a market manipulation scheme to artificially inflate the value of Zandria stock resulted in public administrative actions against him. It remains to be seen how this case will affect Frasier’s legal career and future obligations as the legal process proceeds.
